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Hi, all

Can someone please share their experience with POCI loans? The question is - how do you account for changes in expected cash flows of POCI loans. For example, Company A acquires a POCI loan with a balance value of 100 (Gross = 300, ECL = 100). If Gross changes to 350, how would you account for it - decrease in ECL (charge in PL) or recognise a one-off modification gain in PL? Dr Gross Cr ECL (in PL) or Dr Gross Cr Modification gain?
I couldn't find an answer in previous topics...sorry

see this example:

https://ifrscommunity.com/knowledge-bas ... justed-eir

Marek, hi. I've seen this example before, but my questions are - 1) do you account for this impairment gain of 445 as an ECL PL charge or do you account for it as a one-off modification gain? 2) Is it acceptable not to disclose a separate ECL PL charge and just show income at CAEIR + modification gain in the statement of comprehensive income? Or would it be appropriate to disclose just income at CAEIR net of modification gain (which is impairment gain in other words)?


1 Jan OB Imp.gain % CF CB
31 Dec"
2003 5,000 - 623 - 5,623
2004 5,623 - 701 - 6,325
2005 6,325 - 789 - 7,113
2006 7,113 445 942 (8,500) -

if there was no contract modification, then there's no modification gain/loss, to me it's just a change in ECL charge (impairment in P&L)

what's CAEIR?

CAEIR is credit adjusted effective interest rate.
But how would you disclose this change of ECL in the statement of comprehensive income? Should it be disclosed on the face of SOCI?

yes, as a part of "impairment losses (including reversals of impairment losses or impairment gains) determined in accordance with Section 5.5 of IFRS 9"
(IAS 1. 82(ba))